Spirit AeroSystems provides 737 program update

Beginning in March of 2024, Spirit (SPR) and Boeing (BA) established a joint product verification process to ensure conformity of fuselages prior to transportation to Boeing’s final assembly site in Renton, Washington. Spirit’s deliveries continue to be delayed as the companies work together to optimize the process. During the second quarter of 2024, the Company delivered 27 Boeing 737 fuselages, which was lower than anticipated. Spirit’s production facilities cycled at a rate of 31 aircraft per month during the quarter, a rate faster than the units were accepted through the product verification process, which led to an increase of undelivered units in Wichita, Kansas. This delay in deliveries contributed to higher levels of contract assets and inventory, which resulted in higher operational cash usage. Once the completed units can be fully inspected and accepted by the customer, they will be considered delivered which will allow Spirit to collect on those units. Spirit’s revenue in the second quarter of 2024 increased from the same period of 2023, primarily due to higher production activities on most Commercial programs and higher Defense and Space revenues, partially offset by lower production volume on the Boeing 737 program. Overall deliveries decreased to 336 shipsets during the second quarter of 2024 compared to 342 shipsets in the same period of 2023. Spirit’s backlog at the end of the second quarter of 2024 was approximately $48 billion, which includes work packages on all commercial platforms in the Airbus and Boeing backlog.